After an emotionally draining divorce, the last thing anyone wants to think about is their tax situation. Unfortunately, that’s only one on the long list of complications that come with life after divorce. You may need to consider alimony payments, address changes, child custody arrangements, and other issues that affect your taxes.
1. Your filing status
While this may seem like a given, it’s not quite as black-and-white as it appears on the surface. According to the IRS, you’re still technically married if your divorce is not final as of December 31, even if you’ve been handling it all year. Conversely, if you finalize your divorce on December 31, you will be considered unmarried for the whole year and must file as single or head of household.
2. Alimony and child support
If your divorce agreement was finalized before December 31, 2018, you could deduct alimony you pay to an ex-spouse. However, the laws have since changed, and it’s no longer deductible.
Similarly, you cannot deduct the child support you pay. The money you spend on feeding, clothing, and sheltering your children are considered personal expenses.
3. Claiming dependents
When parents divorce, only one can claim their child as a dependent on their tax return. The general rule is that the custodial parent, who the child lives with for the majority of the year, is who gets to claim. If the time is equal, then the dependent child can be claimed by the parent with the higher adjusted gross income.
4. Tax Withholdings
Following your divorce, you need to make sure that you update the amount of income tax to reflect your current circumstances. For example, you will no longer be receiving an allowance for being married, and your total household income will have changed.
5. Personal Information
Inform the RS of any changes that have occurred, such as your address or legal name. This will ensure that they have accurate information.
Rech Law is here for you during your divorce. Call us today at (704) 659-0007 to set up a consultation with our Charlotte divorce attorneys.